Ship Recycling: Indian Market continues to face sluggish conditions: STAR ASIA

Ship Recycling: Indian Market continues to face sluggish conditions: STAR ASIA

The Indian market continues to face sluggish conditions despite a slight improvement in price sentiment, with local activity showing minimal movement while the scarcity of available tonnage has prompted increased buyer interest. Despite this growing interest, price levels remain stagnant around previous benchmarks, creating a cautious market atmosphere where participants are reluctant to commit without seeing more substantial changes.

Recycling has experienced heightened interest recently, but buyer uncertainty persists due to the recently implemented safeguard duty on imported scrap, which has affected the stability of offers. The approaching fiscal year-end on March 31 has further dampened demand for imported scrap, though domestic scrap generation remains higher than last year, contributing to the subdued interest in imports.

Looking ahead, market participants anticipate that demand for recycled materials will improve in April as buyers typically restock before the monsoon season begins in June, potentially bringing more vitality to the industry.

Alang Anchorage & Beaching Position (MARCH 2025)

Chattogram, Bangladesh

As the nation heads into an extended Ramadan holiday, economic activity has slowed significantly. The ship recycling market has also seen a decline in demand, with most recyclers already holding ample tonnage at their yards, effectively satisfying current capacity needs. In March alone, approximately 132,683 light displacement tons (LDT) arrived at recycling yards, ensuring a robust supply ahead of Eid-related buying.

Looking ahead, the market may experience a price correction as these vessels re-enter production, while underlying demand remains lackluster.

Anchorage & Beaching Position (MARCH 2025)

Gadani, Pakistan

Recycling activity in Gadani saw minimal movement due to Eid, though slight optimism persists for the post-holiday period. However, this optimism is tempered by ongoing concerns about liquidity issues that continue to put pressure on mill profit margins, creating a measured outlook.

Anchorage & Beaching Position (MARCH 2025)

Aliaga, Turkey

Turkish scrap market activity has nearly halted since the beginning of the week despite some mills still requiring April-shipment cargoes, as frozen steel demand amid political and economic unrest keeps buyers cautious about committing to large volumes.

Turkish manufacturers are actively exploring alternatives like Chinese billet imports to replace scrap requirements. Production costs are becoming unsustainable for Turkish mills, who face a 25% energy price increase from April while struggling to sell steel in both domestic and export markets despite maintaining rebar offers at US$570-595/t ex-works with discounts of up to US$5/t.

Sub-Continent and Turkey ferrous scrap markets insights

Sub-Continent Imported Scrap Markets Remain Sluggish Amid Weak Demand and Economic Constraints

The imported scrap markets across the Indian sub-continent continued to struggle this week, weighed down by weak demand, financial constraints, and the seasonal slowdown ahead of Eid. Buyers in India, Pakistan, and Bangladesh remained cautious, with liquidity challenges and limited letter of credit (LC) approvals further restricting trade volumes.

Meanwhile, Turkey’s scrap market maintained its downward trajectory as domestic steel demand remained lackluster. Market participants anticipate a gradual recovery post- Eid, though high global scrap prices and ongoing economic instability may cap any significant rebound.

India

India’s imported scrap market remained sluggish, largely due to financial year-end closures that kept buyers cautious despite some early-week optimism. Northern markets saw a brief surge in bookings at the start of the week, while buyers in Nhava Sheva witnessed a price increase of US$5-7 per ton. However, the overall market remained slow, with bid-offer mismatches limiting transactions.

Pakistan

Pakistan’s imported scrap market saw subdued activity as buyers adopted a wait-and- watch approach ahead of Eid. Liquidity constraints and LC issues continued to impact transactions, keeping trade volumes low. Market players expect an improvement post- holiday, though high global scrap prices and broader economic uncertainty could limit any sharp recovery.

Bangladesh

Bangladesh’s imported scrap market faced persistent sluggishness as buyers resisted high offers amid economic uncertainty and LC approval limitations. With a 10-day halt in new LC approvals ahead of Eid, market sentiment remained weak, and domestic scrap prices showed signs of softening.

Turkey

Turkey’s imported scrap market continued its downward trend as mills refrained from restocking due to weak domestic rebar sales. Despite ample cargo availability, demand remained sluggish, causing prices to decline further. A weakening euro indicated the possibility of softer European scrap offers in the coming weeks.

While the sub-continent’s scrap market is expected to gain momentum post-Eid, ongoing financial constraints, high global scrap prices, and economic headwinds could prevent any significant rebound. Buyers are likely to remain cautious, closely monitoring price trends and market conditions before committing to large-scale purchases.

Ship Recycling Market Snapshot

• All prices are USD per light displacement tonnage in the long
• The prices reported are net prices offered by the recycling
• Prices quoted are basis simple Japanese / Korean-built tonnages trading Premiums are paid on top of the above-quoted prices based on quality & quality of Spares, Non-Fe., bunkers, cargo history, and maintenance.

5-Year Ship Recycling Average Historical Prices (Week 13)

Ships Sold for Recycling